Fitch Ratings assigns an 'AA-' rating to Hillsborough
County, FL's approximately $60 million capital improvement non-ad
valorem refunding revenue bonds, series 2006. The bonds are expected
to price on March 29 through competitive bid. Proceeds of the bonds
now offered will be used to currently refund capital improvement
program refunding bonds, series 1996A and 1996B. The net present value
savings on the refunding bonds are estimated to be 3.0% of refunded
par. Fitch also affirms the 'AA-' rating on outstanding non-ad valorem
bonds, including $20.3 million in series 1998 bonds and $17.9 million
in series 2005 bonds. The Rating Outlook is Stable.
The rating and Stable Outlook reflect the security provided by Hillsborough County's covenant to budget and appropriate non ad valorem revenues, which provide ample debt service coverage, and the county's strong general credit characteristics. The county intends to make debt service payments from a locally imposed traffic surcharge, the county's fourth-cent tourist development tax, and from a portion of the state-imposed one-half-cent sales tax (the half-cent sales tax). Financial management and operations are sound, with healthy reserves, conservative budgeting, and detailed policies. The economic base is diverse and growing, and has shown notable stability during the last several years.
The county's non-ad valorem revenues include the half-cent sales tax, the county's community investment tax (CIT; a one-half-cent local option sales tax), and a variety of other taxes, charges, and fees. A first lien on a number of these sources, including the half-cent sales tax and the CIT, secure the revenue bonds (working liens both rated 'AA' by Fitch), so as a practical matter payment on the non-ad valorem bonds is subordinate to a variety of revenue bonds. The county plans to issue bonds secured by the half-cent sales tax the week of March 27. For additional information on that security please see the Fitch's release titled 'Fitch Rts Hillsborough County, FL Cap Improv Prog Refs 'AA', issued concurrently with this release.
Excluding both revenues and debt service related to other revenue bonds, coverage of non-ad valorem bonds solely from legally available sources was 8.7 times (x) in fiscal 2005. Mitigating the risk of excessive additional leveraging is the need for residual revenues to fund operations, the county's conservative budgeting and financial practices, and an anti-dilution test requiring coverage of 1.5x by available non-ad valorem revenues net of essential services not funded with ad valorem revenues.
The county's general obligation rating reflects its strong financial policies and practices, a moderate tax-supported debt burden, and growing and diversifying economy. The service and trade sectors account for the largest components of the employment base. Tampa is home to numerous regional headquarters of multinational finance and insurance companies, providing employment opportunities to residents countywide. The county's unemployment rate is below the state's and nation's and per capita retail sales exceed the state and nation by 29%. Tax base growth has been strong, averaging 11.5% annually over the past five fiscal years.
Fiscal 2005 ended with an unreserved general fund balance of $121.5 million, representing an ample 15.1% of expenditures, transfers out, and other uses. Overall debt is moderate, at 3.9% of taxable assessed value (TAV). The fiscal years 2006-2011 capital plan includes $955 million in planned spending, 34% of which will be debt financed with general government and self-supporting enterprise fund revenue bonds. The remaining 66% will be funded on a pay-as-you-go basis from a variety of sources, including enterprise system fees, property taxes, and sales tax revenues.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
The rating and Stable Outlook reflect the security provided by Hillsborough County's covenant to budget and appropriate non ad valorem revenues, which provide ample debt service coverage, and the county's strong general credit characteristics. The county intends to make debt service payments from a locally imposed traffic surcharge, the county's fourth-cent tourist development tax, and from a portion of the state-imposed one-half-cent sales tax (the half-cent sales tax). Financial management and operations are sound, with healthy reserves, conservative budgeting, and detailed policies. The economic base is diverse and growing, and has shown notable stability during the last several years.
The county's non-ad valorem revenues include the half-cent sales tax, the county's community investment tax (CIT; a one-half-cent local option sales tax), and a variety of other taxes, charges, and fees. A first lien on a number of these sources, including the half-cent sales tax and the CIT, secure the revenue bonds (working liens both rated 'AA' by Fitch), so as a practical matter payment on the non-ad valorem bonds is subordinate to a variety of revenue bonds. The county plans to issue bonds secured by the half-cent sales tax the week of March 27. For additional information on that security please see the Fitch's release titled 'Fitch Rts Hillsborough County, FL Cap Improv Prog Refs 'AA', issued concurrently with this release.
Excluding both revenues and debt service related to other revenue bonds, coverage of non-ad valorem bonds solely from legally available sources was 8.7 times (x) in fiscal 2005. Mitigating the risk of excessive additional leveraging is the need for residual revenues to fund operations, the county's conservative budgeting and financial practices, and an anti-dilution test requiring coverage of 1.5x by available non-ad valorem revenues net of essential services not funded with ad valorem revenues.
The county's general obligation rating reflects its strong financial policies and practices, a moderate tax-supported debt burden, and growing and diversifying economy. The service and trade sectors account for the largest components of the employment base. Tampa is home to numerous regional headquarters of multinational finance and insurance companies, providing employment opportunities to residents countywide. The county's unemployment rate is below the state's and nation's and per capita retail sales exceed the state and nation by 29%. Tax base growth has been strong, averaging 11.5% annually over the past five fiscal years.
Fiscal 2005 ended with an unreserved general fund balance of $121.5 million, representing an ample 15.1% of expenditures, transfers out, and other uses. Overall debt is moderate, at 3.9% of taxable assessed value (TAV). The fiscal years 2006-2011 capital plan includes $955 million in planned spending, 34% of which will be debt financed with general government and self-supporting enterprise fund revenue bonds. The remaining 66% will be funded on a pay-as-you-go basis from a variety of sources, including enterprise system fees, property taxes, and sales tax revenues.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.